Sports Direct profits trigger £88m bonus windfall for staff

Sport Direct's 2,000 staff received a windfall on Thursday after the retailer
hit its profits target for the second year in a row, triggering an £88m
share bonus with an average payout worth nearly £44,000.

The company, founded and controlled by Newcastle United owner Mike Ashley, revealed underlying profits of £200.4m in the year to April 24, exceeding its "ambitious" target of £195m.

Sports Direct International

As a result, the scheme will pay out shares currently worth an average £30,960 each. Combined with a payout for meeting the previous year's target, their awards are now worth an average of £43,850.

However, under the terms of the scheme staff will have to wait a least a year to start cashing in the shares, which have risen 128pc over the past year.

Sports Direct, which owns Sports World and Lillywhites stores as well as brands including Slazenger and Kangol, said revenues rose 10.2pc to £1.6bn, helped by like-for-like UK retail sales growth of 6.6pc and an increase in gross margin from 40.6pc to 41.2pc.

Although if interest, depreciation, amortisation, finance costs and other one-off charges are included, pre-tax profits fell 0.6pc to £118.8m. Sport Direct shareholders will also receive no final dividend.

David Forsey, chief executive of Sports Direct, attributed much of the group’s recent success to the employee profit share scheme, saying suggestions that the profits were boosted by rivals' woes had been "overplayed".

"You think first off that they must be a weak competitors and that we are benefiting, which is not the case. JD Sports have been more aggressive in the last few months with their mega sales, which they don't normally do," he said.

"The bonus share scheme has been massive influence over the performance of the group ... It has acted as a glue to pull everyone together."

Last week Sports Direct acquired an 80pc stake in fashion business USC and retailer Cruise Clothing for £7m. They will form a new "premium and luxury lifestyle" division within the chain.